What Is ZEC? Introduction to Zcash

Zcash is a cryptocurrency just like Bitcoin and Litecoin, but with a few improvements to the structure. The Zerocoin protocol that became the Zcash cryptocurrency in 2016 was created by the Zcash Company, founded by Zooko Wilcox-O’Hearn. It uses cryptography to enhance user privacy, so Zcash transactions can either by transparent like Bitcoin, or shielded through a zero-knowledge proof called zk-SNARKs.

While this concept sounds shady to law enforcement, the Zcash Company insists it was developed to act more like fiat currency than to facilitate any type of illegal or criminal activity.

Most exchanges and wallets only support transparent Zcash transactions, and only 4 percent of the current ledger is in the shielded pool as of May 1, 2018. Adding to the chaos of providing anonimity, Zcash is also facing its first hard fork and may see more in the future.

Can this pure cryptocurrency survive alongside Bitcoin in a crowded market? The recent furor over Facebook’s privacy settings may be a sign that Zcash is in the right place at the right time.

Before diving into the issue Zcash addresses, let’s look at its financial performance over the past two years.

Zcash Coin Pricing and Value

Zcash has a market cap of $1,082,876,335 as of May 1, 2018. This is based on a circulating supply of 3,822,231 ZEC (out of a total supply of 22,000,000) at a price of $283.31 per coin.

While Zcash did follow the market trends of the rest of the cryptocurrency industry, it only ever had one initial spike at launch and experienced modest 10x gains during the cryptoboom of 2017. It’s still worth ~5-6x more than its pre-boom price.

This makes Zcash a popular investment in crypto circles, as its especially built for investors and hodlers who love checking price charts daily. While cryptos like Ethereum or NEO are more focused on app development using their blockchains than anything, Zcash is a pure altcoin meant only for use as a digital currency.

It has a stake in proving its relevancy, and it’ll be categorized with Bitcoin more than Ethereum on the general market.

Zcash Relieves the False Promise of Bitcoin

Privacy, security, and decentralization have long been the promise of cryptocurrency and blockchain. From 2009-2014, Bitcoin was primarily ignored by the mainstream but accepted by the counterculture. By 2014, it was notorious enough for Reuters to declare it the start of a financial revolution.

Bitcoin’s initial acceptance was from the crowd whose celebrities included Edward Snowden, Ross William Ulbricht, Jeremy Hammond, and Ladar Levison. It rose to prominence in the midst of the Occupy movement in the U.S. and Europe, along with the Arab Spring movement across the Middle East. Hacktivist group Anonymous used social media to assist boots on the ground in any localized anti-establishment movement with maintaining secure communications. Governments notoriously monitor dissidents around the world, but groups like the EFF and ACLU protect everyone on a legal front.

Journalists and doctors and teachers and lawyers and aid groups and so many other non-terrorist volunteers need to provide anonymity to do their jobs. Anonymity isn’t a criminal activity in and of itself. We all want to hide in the crowd, but privacy and anonymity aren’t as easy to gain in the Internet age.

Wikileaks started accepting Bitcoin alongside other businesses, and cryptos gained more support as the Bitcoin team pushed for mainstream acceptance. But it wasn’t an open-and-shut case.

Long before computers, governments tracked us through currency transactions. Bitcoin showed a new way, but it wasn’t as anonymous as people thought when using them for donations to activist groups or buying molly on the dark web.

Things haven’t gotten better, and checks and balances are always needed. Even the government has a $52+ billion black budget for hidden expenses. Zcash has a right to exist and a solid ethical point in its structure.

Zcash is even hailed in some circles as a Bitcoin killer.

The Need for Financial Anonymity

In fact, those transactions are all still part of several public ledgers because of the hard forks of Bitcoin. It’s a scary thought to even think a pack of gum I bought 10 years ago could be used against me, much less a donation to a journalist on the Department of Homeland Security’s watch list.

The ability to anonymously donate is a right everyone has, and reputable sites and organizations have help guides to show you how. While anonymous transactions may be used for illegal activities, so can fiat cash, cell phones, credit cards, etc.

Anything can be used as a murder weapon or to facilitate value transfers. While Crypto Kitties may sound like a dumb idea, they’re digital works of art and a very secure way to anonymously transfer value across borders.

Major wallets and exchanges will accept Zcash, but they don’t support anonymous transactions. These would need to be done through OTC or 1-on-1 exchanges, which are gaining in popularity.

As a financial tool, Zcash proves its value, and as it time goes on, its shielded ledger is sure to grow. And it’s important to understand even the shielded ledger can be viewed by the coin holder. If either end of the transaction is compromised, the key can be used to unencrypt the ledger.

Summary

Many cryptocurrencies will retain value somewhere in the world, even if only on the collector market or for an intermediary platform to exchange value. Many believe Zcash will be one of those cryptos and they have a strong case backing them.

Zcash provides the option of transactional anonymity using cryptographical keys for the best mathematical security possible.

The U.S. and other global governments routinely spy on people’s data, including financial data.

Privacy is a hot-button issue around the globe, and control over our own anonymity is defended by several civil rights groups, including the ACLU, EFF, and Anonymous.

Apple, Facebook, Google, Amazon, and Lavabit all had very different reactions to government requests for information.

Zcash is a pure altcoin that’s like Bitcoin in structure and maintains sustainable pricing.

Bitmain has released an ASIC dedicated to the Equihash algorithm, that can mine Zcash faster.

Zcash has a lot of momentum, and there will always be a need. It’s nice to support blockchain technology or the business plan behind an ICO, but that’s not Zcash.

Zcash focuses on truly serving the needs of the unbanked and those who need to exchange value in a pinch.

Brian Penny is a former Business Analyst and Operations Manager at Bank of America turned whistleblower and freelance writer. In addition to Crypto Briefing, you can find his work focusing on financial regulations on Fast Company, Forbes, Huffington Post, and his blog, Thought for Your Penny.

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